IMF and Kenya agree $2.4bn deal to continue government’s Covid-19 support

16 Feb 21

Kenya is set to receive $2.4bn from the International Monetary Fund to enable its government to continue its economic response to the pandemic.

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Kenya flag

Kenya's flag. Image © iStock

The staff-level agreement, which will be subject to approval by the IMF executive board “in the coming weeks”, will last for three years and is aimed at supporting Kenya through the crisis and into recovery.

“The programme will support the next phase of the country’s Covid-19 response and the authorities’ plans for a strong multi-year effort to stabilise and begin reducing debt levels relative to GDP, laying the ground for durable and inclusive growth over the years to come,” said Mary Goodman, who led the discussions for the IMF.

Kenya’s “forceful” early reaction to the pandemic meant GDP contracted by just 0.1% in 2020, the IMF said, and easing restrictions are expected to mean growth rebounds to 7.6% this year.

With this pickup in economic activity, the government has begun to roll back some of its measures, particularly tax cuts, although authorities chose to pause their deficit reduction target again in 2021.

Over the three years of the programme, the government has agreed to raise tax revenues and keep a “tight control” on spending, as well as enacting reforms to enhance transparency and accountability.

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